Blunkett on brink of ID card deal

David Blunkett is poised to strike a multi-billion-pound deal with the major banks which would see compulsory ID cards double as credit cards.

People could choose to use the ultra-secure identity cards to pay for shopping, reducing the amount of plastic clutter in their purses while dramatically cutting fraud at the tills.

The Home Secretary hopes the big banks will leap at the chance to "piggyback" on to ID cards if he can persuade fellow Cabinet ministers to endorse the scheme.

Credit card fraud alone costs some £422 million a year and the banks are being forced to consider expensive new security measures to clamp down on the rackets. Much of the loss is due to simple identity fraud using stolen cards - exactly the type of crime that ID cards could prevent.

Jack Straw and Gordon Brown have vowed to block compulsory cards, saying they would be hugely unpopular and costly. But Tony Blair gave the idea a powerful boost in his keynote speech to the Labour conference when he said cards could protect the public from terrorists and criminals.

Mr Blunkett is determined to win the Cabinet over, believing ID cards are essential to tackle illegal working and immigration rackets as well as combat crime and terrorist groups such as al Qaeda.

Under the Home Secretary's plans, cards would cost the public around £40 each - comparable with the price of renewing a passport or taking out a driving licence.

They would look exactly like credit cards but would have unique biometric details - such as iris patterns and fingerprints - stored in embedded computer chips.

Critics say the costs of ID cards - £40 million in year one, £270 million by year seven, then falling back to £170 million a year thereafter - are bound to balloon because of the complexity of the scheme.

But Mr Blunkett argues that it would be rolled in when people renew their passports or driving licences, turning into a multipurpose document. Every teenager would be issued one for free on their 16th birthday.

Negotiating a deal with the banks would drive down the cost to taxpayers even further, benefiting both the Government and the private sector.

But the Home Secretary is being held back from starting talks by the continuing Cabinet split. The Cabinet's domestic affairs sub-committee is due to come to a decision in time for the Queen's Speech in November.

Mr Blunkett was set to steer clear of the row in his keynote conference speech today.

He was announcing record police numbers - up by 4,118 this year to 136,386 officers - and pledging new laws to throw out failed asylum seekers after just one failed appeal.

Mr Blunkett was also issuing a rallying cry to delegates to keep faith with the Prime Minister's controversial public- sector reforms, warning that they would take time to complete. He was warning that Labour could not afford to "consolidate"

He was also set to declare: "Two terms is not enough. Not enough to prepare Britain for the changes ahead. Not enough to change the culture, the politics, the prospects for our country."

Mr Blunkett's comments will be seen as a swipe against Mr Brown, who used his own conference speech to parade his credentials as a leaderinwaiting.

However, the Home Secretary was seeking to cool the temperature by using the bulk of his speech to set out new ways to rebuild communities rather than tub-thumping announcements.

He was expected to say that developing a stronger sense of community identity was the big challenge for the century - comparable with the establishment of municipal administrations in the Victorian era and the foundation of the welfare state in the 20th century.

But he was expected to maintain a tough line on controversial clampdowns on illegal immigrants, fraudulent asylum seekers, antisocial behaviour and crime.

He was due to tell delegates that all of these problems had caused communities to break up, leaving families open to exploitat ion - and fuelling the rise of the far-Right British National Party.